Paytm Mall and Snapdeal Penalised for Rs 1 Lakh by CCPA
This fine was imposed due to defective pressure cookers sale. In two separate orders, the CCPA found Paytm Ecommerce Pvt Ltd (Paytm Mall) and Snapdeal Pvt Ltd guilty of selling pressure cookers, which did not conform to BIS standards and were non-compliant to Domestic Pressure cooker (Quality Control) Order 2020 (QCO).
The Central Consumer Protection Authority (CCPA) has imposed fine of Rs 1 lakh each on e-commerce firms Paytm Mall and Snapdeal for selling non-standard pressure cookers and asked them to recall the sold items as well as reimburse the amount paid by the consumers.
In two separate orders, the CCPA found Paytm Ecommerce Pvt Ltd (Paytm Mall) and Snapdeal Pvt Ltd guilty of selling pressure cookers, which did not conform to BIS standards and were non-compliant to Domestic Pressure cooker (Quality Control) Order 2020 (QCO).
Paytm Mall listed pressure cookers of Pristine and Quba on its platform despite the product description clearly stating that it does not carry ISI mark.
According to the order dated March 25, the CCPA has ordered Paytm Mall to notify all consumers of the 39 pressure cookers sold on its platform, recall the pressure cookers and reimburse their price to the consumers.
It has been asked to submit a compliance report of the same within 45 days.
Snapdeal listed pressure cookers of Saransh Enterprises and AZ Sellers on its platform that were non-compliant to the norms.
The CCPA issued a similar order in case of Snapdeal asking the e-tailer to recall 73 pressure cookers sold on its platform and reimburse the amount to consumers.
The CCPA in separate orders asked both the e-commerce companies to ”pay a penalty of Rs 1 lakh for allowing sale of pressure cookers in violation to the QCO on its platform and violating rights of consumers”.
Both companies in their case argued that they are intermediaries as per IT Act and the responsibility of content lies with the seller and not on them.
CCPA cited consumer protection (e-commerce) rules, 2020 which states that no e-commerce entity shall adopt any unfair trade practice whether in the course of business or its platform or otherwise.
When contacted, Snapdeal in a statement said, ”This order is against the principle of safe harbour and exemption from liability in certain cases as enshrined under section 79 of Information Technology Act. Moreover, the CCPA has stepped beyond the scope of BIS Act, COPRA and the Consumer Protection (E-Commerce) Rules 2020 which clearly distinguish between the liabilities of a marketplace and the seller of a product on the marketplace. The company will seek an appeal as it is important to set the correct precedent in accordance with applicable law, which has been upheld by multiple High Courts and the National Consumer Commission.”
”However, the interests of the consumers are paramount. While we challenge the order of the CCPA, we will offer a BIS-certified pressure cooker as an immediate replacement to all the customers of the identified sellers, which includes the 73 customers identified in the order. In line with our confirmation to CCPA, the listings of the three sellers have been removed and the sellers have been permanently blocked from the platform.”
As a platform, we continue to deploy technology, supported by manual checking to ensure that no product without compulsory BIS certification is listed on our platform, it mentioned.
In the case of Snapdeal, the CCPA said that it collects platform fees from the sellers for each sale completed on its platform.
”The company commercially gains and profits from the purchase made by consumers on its platform.Therefore, the company cannot divorce from its role and responsibility in case of issues arising from sale of goods on its platform,” the order said.
On March 14, the Ministry of Consumer Affairs had informed that the Bureau of Indian Standards (BIS) has seized 1,032 pressure cookers and 936 helmets which were found to be without ISI mark and violated the Quality Control Orders (QCO).
The BIS has conducted search and seizure operation for violation of QCO on helmets and pressure cookers.
The ministry had also shared that the CCPA has issued 15 notices against e-commerce entities and sellers selling non-standard pressure cookers online.
The Authority has also issued safety notice alerting consumers against buying household goods like electric immersion water heater, sewing machine, cooking gas cylinder, helmet and pressure cooker without valid ISI mark.
In exercise of powers under Section 18(2)(j) of the Consumer Protection Act, 2019, the CCPA has issued the safety notice. In December also, it had issued a notice.
Under the Act, goods which violate compulsory standards are liable to be held ‘defective’.
The safety notices have been widely circulated among all States & UTs, industry associations, legal service authorities, consumer associations and law chairs.
The CCPA has decided to take up cases involving sale or offering for sale goods which violate compulsory standards to prevent unfair trade practice and to protect, promote and enforce the rights of consumers as a class.
Therefore, any person found selling the household items without conforming to compulsory standards and holding a valid licence as prescribed by BIS shall be liable for violation of consumer rights and unfair trade practices and face action under the 2019 legislation.
The Section 17 of the BIS Act, 2016 prohibits any person to manufacture, import, distribute, sell, hire, lease, store or exhibit for sale, any such goods or articles that are in violation to the direction of compulsory use of Standard Mark published by the Central Government.
Any person who contravenes the provisions of section 17 shall be punishable with imprisonment for a term which may extend up to two years or with fine, the ministry had said.